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Action Teams (Middlesbrough)

The Minister for Employment and Welfare Reform (Margaret Hodge) : I start by congratulating my hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) on securing the debate. I know of his concerns about the action team because he wrote to me recently about it. He works extremely hard and diligently in representing the interests of his constituents in Westminster, and I congratulate him on that, too.

I agree entirely with the tribute that my hon. Friend paid to the work of action teams, both in his constituency and more widely. The action teams were a pilot programme that we started in 2000, and there are now 64 action teams around the country. They are focused in areas of particular deprivation and worklessness, and their strength is that they can engage in more innovative ways of reaching people, so that they can start discussing the possibilities of work with people who may not have sought that as an option for themselves. They can then work through and tackle the barriers that individuals face and help them into work.

Through the action teams across the country, nearly 160,000 people have successfully been supported back into work. Some teams are run by Jobcentre Plus and some by private and voluntary sector providers, including Working Links, which is one of our key providers. We have looked at the performance of private and voluntary sector providers. It may interest my hon. Friend to hear that in the particular set of interventions that we are talking about, Jobcentre Plus teams tend to do better than some private and voluntary sector providers; that certainly interested me. Jobcentre Plus teams tend to be better at reaching out to those who are very distant from the labour market, whereas in an outcome-based contract, the private and voluntary sectors tend, on the whole, to go for those who are easier to reach, so that they can hit their target.

That leaves us with a challenge as we think about the next phase of the work. On the whole, the action teams have been extremely successful. In the year up to February 2006—not the whole year, just 11 months—the action team in Middlesbrough outperformed its targets. It achieved 477 job entries against a target of 380. Its target for reaching those people who are distant from the labour market and would not be reached through the new deal programmes was 266. In fact, the action team reached 356 people. It is a good record, and I congratulate the action team on its work.

We must set the context in which we are considering the future. When we established action teams, there was little activity or active labour market intervention with people other than those on the traditional new deal schemes, such as jobseeker's allowance. So the new deal for young people and the new deal 25-plus were up and running, and we were beginning to experiment with a new deal for lone parents, but there was little intervention with the incapacity benefit group and with the broader income support group, and there was no intervention with those who were not claiming any benefits but who were, nevertheless, out of work. Therefore, it was in that context that we established the action teams.

Since the establishment of the action teams, we have created Jobcentre Plus, bringing together in one place the processes to claim benefit and the initial and continuing advice to support people back to work. It is an innovative second phase of our welfare reform programme. As this round of the action team programme comes to an end, we are thinking about the future in the context of a changed environment, with Jobcentre Plus starting to engage in a much more active way with people with whom, in the past, it would not have engaged. That includes people on income support, those who claim incapacity benefit, and those who do not work but do not claim any benefits.

The second change, of which my hon. Friend will be well aware, involves the proposals and propositions contained in the welfare reform Green Paper. Through pathways to work, which, by October, will be up and running in about one third of the country, we are beginning to engage actively with incapacity benefit claimants in the early stages of their lives on that benefit. It is one of the most effective labour market interventions attempted throughout the developed world to deal with that group of people who face incredible barriers and huge challenges in trying to return to the workplace. Through pathways to work, we have successfully ensured that 8 per cent. more people than ever before have come off incapacity benefit during the first six months of their lives on that benefit. This is a new innovative engagement with people on incapacity benefit that did not exist when action teams were first created.
As my hon. Friend will know, we have plans to ensure that pathways to work are offered across the country by 2008. We have reprioritised our departmental budget and have secured an additional £360 million to ensure that it can be offered to all new incapacity benefit claimants by 2008. Much of the work carried out initially by action teams will be encompassed by pathways to work. We have also decided that the next phase of the roll-out of pathways to work will not be done through Jobcentre Plus but through private and voluntary providers. It is such ground-breaking public policy that we want lots of innovation and the greater flexibility that the private and voluntary sector enjoy, which is not always present in statutory agencies. The private and voluntary sector is often better placed to get multi-agency working, which my hon. Friend talked about, on the ground. We want to experiment and to keep trying to discover what works so that we can build on that best practice as we roll out services to our clients who are on incapacity benefit.

I have had long discussions with Working Links and have absolutely no doubt that it will be active in the new market that we are creating to provide the services for people in local communities. There will be opportunities for Working Links to carry on doing much of the work it has been engaged in to date in places such as Middlesbrough and elsewhere. I had a meeting yesterday with Working Links in Wales about its work. It is very much action-team led at present, but it will develop in the broader context.

I hope that my hon. Friend will take my next important point back to his constituency. There is a concept in the welfare reform Green Paper which is incredibly important in tackling worklessness in the much more constrained fiscal environment of the coming years. Throughout the country, under the Labour Government, there have been many new programmes and innovations involving training and skills deficits, worklessness and community regeneration in which access to a job is a vital and central ingredient.

The £100 million a year that goes into Bradford, for example, to tackle worklessness comes from the Department for Work and Pensions, the Learning and Skills Council through the Department for Education and Skills, local authorities, the Office of the Deputy Prime Minister via the inner-city regeneration programmes, Europe and the regional development agencies. There is a huge range of funding streams, many of them targeted at the same group of people. As my hon. Friend rightly said, they have different time frames and slightly different objectives, but they are all trying to do the same thing.
What is proposed in the welfare reform Green Paper will bring the separate funding agencies, the funding streams and the partners together as a consortium in a locality, starting in cities where worklessness is one of the most challenging problems. We will set them very simple outcome targets and shift away from a process-driven endeavour to an outcome-driven effort. I hope that they will then decide either to pool their budgets or at the very least align them and work together to achieve the objectives, which will give much greater flexibility.

We have negotiated with the Treasury what is quite a breakthrough in the way in which we run the public finances: an agreement in principle—we have to work through the detail of it—that if a city or a locality is effective in getting more people into work and therefore cutting the benefit bill, some of the savings that the Government get can be reinvested in the city through further services. That will give Middlesbrough and other parts of the country a framework in which they can operate in a creative way, responsive to their local circumstances. It will enable them to tackle the very long-term and difficult worklessness that my hon. Friend, like most hon. Members, faces in his constituency.

Jobcentre Plus, the welfare reform Green Paper, pathways to work and the city strategy are informing how we look forward. At the same time, we are looking carefully at the lessons we have learned from the action teams, and we are taking things forward. For example, we know that outreach work is particularly important in respect of certain groups who might be very distant from the labour market—there might be cultural boundaries or third-generation worklessness in families, or there might be issues to do with low skills levels or poor English. Individuals face a range of barriers, and outreach is a key way of trying to start that initial engagement, which draws people into appropriate programmes to bring them closer to the workplace. We have understood that.
Something else we have understood is the power of discretionary funding. My hon. Friend described the way it is used in Middlesbrough. Traditionally, many of the new deal programmes have been very process-driven. If we can get more discretion into the way in which we operate, we can build services around the needs of the individual in a much more direct and beneficial manner, and therefore get more effect for the money we spend, and help more people who are coming into work through that. We will take on board those lessons as we move forward.

We will continue to have an area-based approach, which is what the action team for jobs was all about. That clearly makes sense. We hope that that will grow through the city strategy, but until that strategy is in place across the country, we will take and pull together the money that went on the action teams for jobs and money that has been used for ethnic minority outreach work, for example, and for the working neighbourhood pilots—another area-based pilot that has been taking place across the country.

What we are thinking of then doing—my hon. Friend can reflect on this and write to me if he feels it makes sense in respect of his constituency—is leaving it to Jobcentre Plus at district level to determine how best to allocate those resources. We will concentrate the resources, probably on the 1,000 most deprived wards in the country, but we will leave the decision on how best to use that money to the Jobcentre Plus district manager.
In some instances—this may be the case in Middlesbrough—the decision might be made to continue the work of the action team for jobs work which my hon. Friend believes is so effective. I hope that district managers will properly consult local representatives and other stakeholders, but allowing that discretion at local level is the beginning of the decentralisation in the use of resources that I want to see. That is the most effective way to have an impact, particularly in an environment of tight financial constraints.
The sum that we are talking about is probably in the region of £90 million over the two-year period. The resources are generous; we are not cutting the programme. We will just try to learn lessons, decentralise decision making, and then leave things for the local district managers to decide. What happens in Middlesbrough will not be my decision; it will be the district manager's decision. He is closer to the ground, and he will make more effective decisions.

I hope my hon. Friend agrees that what matters is not the programme itself; it is the work that that programme undertook. We want to maintain that and to learn from where it has been effective. It has been more effective in some areas than in others. We need to engage with those areas where it has been effective.

The aim in respect of this very difficult group of people who have never really thought about work before is to reach out to them and to bring them into the labour market so that they can enhance their lives and contribute to the local and national economies. That is groundbreaking. Letting many flowers bloom in different areas is a good way of moving forward.

We are determined to tackle worklessness. I know that that also underpins my hon. Friend's concerns about what happens in his area. We also want to ensure that, through the use of our resources, we provide greater opportunity for all. The right to work is as important as many other civil rights that we have all been pursuing in our various guises throughout our working lives. Work gives one not only the wherewithal to sustain oneself and one's family, but a network of friends. It also ensures that within a community and a circle, a person has status and purpose. That gives them a sense of value and contributes to the strong community that we know makes for a better Britain.